First, I'd like to thank John Anderson and ELCON for inviting me to speak today. The timing is fortuitous, given that we are at a serious nexus in climate policy. Over the weekend, the country dodged a bullet when Lindsey Graham had a sudden epiphany and realized that he's not a Democrat.

Had I known, when John asked me to talk to you about climate policy that we would now be waiting on the possible introduction of yet another Senate climate bill, I'd have suggested he title my presentation: U.S. Climate Policy, A State of Confusion.

Because that's largely where things stand right now, in a fairly strong state of confusion.

And it's not only in climate policy at this point, there's quite a lot of confusion in the underlying climate science as well.

Temperature records collected over the last 160 years suggest a broad global warming from about 1850 to 1998 of about 0.76 ?C (about 1.4 ?F).

I say "suggest" now, where I would have previously said "show" because after the release of emails and documents from various climate research groups, there is now significant evidence that the underlying temperature data has been manipulated and cherry-picked to exaggerate the extent of warming that has actually transpired. Governments, at least, aren't confused about this issue, they know exactly what to do--whitewash the whole thing--which is what they're doing.

But there's plenty other confusion popping up in climate science.

Predictive climate models have utterly failed: Over the last 15 years, warming has peaked, flattened out, and recently declined, while greenhouse gases continue to rise.

Climate models did not predict this trend, and such trends call the validity of such models into question. Of course, predictive modeling, like forecasting, isn't science, and is rarely if ever of much value.

The region of the atmosphere that physics suggests should show the most warming, the tropical troposphere, isn't warming as predicted, suggesting bigger gaps in our understanding of how heat travels around the planet than are commonly admitted to by climate activists.

And, as MIT's Richard Lindzen observes, there is evidence of negative feedbacks not included in models, that is, feedback mechanisms that offset greenhouse-gas induced warming, and it's possible that doubling (or tripling) of CO2 could well produce very little warming on net.

What's my own bottom line on the science? I am confident that the greenhouse effect is a valid scientific theory, and that greenhouse gases can trap heat in the atmosphere, causing global warming, and climate change, but I think that the extent to which they're likely to do so has been grossly exaggerated.

The basic physics of the situation, stripping out unsubstantiated feedback assumptions and the like suggest that doubling atmospheric greenhouse gas levels is likely to produce only a modest warming, of around 1 degree C, possibly less. That could cause some local challenges in places of extreme climatic sensitivity, but will most likely cause modest challenges, and some off-setting benefits.

I could go into more details, and will be glad to in the question and answer period, but I want to move onto rampant confusion that infuses climate policy discussions.

Let's start with confusion (not to be confused with Confucian) about China. Some people, particularly environmental activists claim that China is just waiting for U.S. leadership, and will follow our example if we go first. To which, I reply "of course they will, just as they've followed our lead on religious freedom, property rights, rule of law, women's rights, abortion rights, and all the other areas where we've been showing leadership for tens to hundreds of years."

And anything we do alone in climate policy, including shutting down the entire country, will have no impact on climate change unless China joins us, and they don't plan to. That fundamental reality is why international negotiations are falling apart: nobody believes China plans to go along.

Not only will China's emissions swamp any possible reduction we might achieve, they're poised to take advantage of our energy naiveté, selling us the solar cells and windmills that we'll use to hike our own energy costs, and reduce our competitiveness. China controls 95% of the rare earth elements needed to build such devices, and they're increasingly banning exports of the raw materials, in order to keep production at home.

Let's move onto confusion about Kyoto, and more recently, Copenhagen. The Kyoto protocol was fatally flawed, badly, from the beginning. It was never going to happen, and will never happen. The central premise of the Kyoto Protocol, and all its suggested extensions and replacements are based on the idea that developed countries are willing and able to export massive amounts of wealth and technology--including intellectual property rights--to the developing world. When that happens, hell will need space heaters.

The Europeans, in a fit of policy masochism, have tried some of this for a while, sending Euros to places like Russia and China for fraudulent carbon permits, but other countries, such as Australia, are rejecting the European model. They realize that most of the cheap offsets that they might buy will come from countries that are barely capable of holding an honest election (those that bother to try), much less account for their carbon emissions.

Kyoto expires in 2012, and outside of trading firms with a monetary interest to protect, few in the developed world are showing a great interest in reviving the moribund Kyoto process.

Now, let's move on to confusion about Cap-and Trade. Cap-and-trade happens to be a powerful policy tool in environmental protection, when it's applied to the right pollutant, in the right political and economic conditions. None of those conditions hold true for greenhouse gases, which unlike say, sulfur dioxide, are not suited to being controlled through a cap-and-trade scheme.

Sulfur dioxide was easily measured, easily (and cheaply) controlled, was emitted by a relatively small group of people in a single sector (coal power plants), and there was a single jurisdiction with easy compliance monitoring.

Greenhouse gases have none of these traits.

Finally, let's consider the confusion about the Clean Air Act. The clean air act is yet another instance of applying the wrong tool to a given job. The Act was never designed to control Greenhouse Gases, and it is woefully inadequate to the task.

Consider a little of what would happen if EPA applies the Clean Air Act as they would for controlling say, particulate matter, ozone, or other conventional air pollutants.

First, EPA must declare a safe limit for greenhouse gas emissions. Normally, that's a multi-year process. EPA is already being sued simply over having issued a finding that greenhouse gases pose a threat to public health. Wait for the lawsuits over setting an acceptable level of the different greenhouse gases.

Then, EPA would have to designate non-attainment areas, which, in this case, would be everywhere, not just a few polluted cities.

Then, those areas must prepare compliance plans, which must roll into state plans, be in harmony with state transportation plans, and which must be approved by the EPA. If the EPA doesn't like those plans, they can impose a Federal Implementation Plan backed up by economic sanctions for non-compliance.

At every stage, legal action can (and almost certainly will) be pursued.

It took almost 10 years for EPA to get through legal fights over their revisions to the 1997 Ambient Air Quality standards, and compared to the greenhouse gases, those were relatively well understood.

Right now, EPA is using the Clean Air Act as a threat. I doubt they have any desire to actually use it to regulate greenhouse gases. They're also claiming that they can implement the Clean Air Act control of greenhouse gases in ways that are not specified in the Act, and sometimes directly violate its provisions. EPA's claiming it will only regulate large emitters, for example, when the Clean Air Act requires they regulate small emitters of greenhouse gases as well. Will environmental groups sue EPA to force their hand? In the past, they said they would. More recently, some have pulled back. The situation, as with the others, is confused.

Kenneth P. Green is a resident resident scholar at AEI.